About This Blog
A QualitEvolution is intended to capture positions and experiences as a participant in the evolution of the Quality profession into the 21st century. From its origins as the brainchild of Corporate Industrial Statisticians, our profession has transformed and evolved to incorporate and adapt to the demands and expectations of our modern existence.
The scope of the subject matter within A QualitEvolution extends to the furthest ranges of quality, business transformation, management science, and quality issues especially pertinent to the members of ASQ in Canada.
Sunday, October 7, 2012
Cost of Poor Quality: Lessons Learned from a Massive Meat Recall
This recall has been publicized and is currently under investigation by the Canadian government. Readers can view the process first-hand at XL Foods Inspection Report. The company is known officially as "Establishment 38".
Lesson 1: Analyze, Improve, and Control process outcomes
FINDING: Establishment 38 had monitoring measures in place but was not properly conducting trend analysis of the data it collected. The CFIA review found that the plant needs to improve its trend analysis and also stengthen its response measures when a higher than normal number of detections are made.
In this case, the company committed the infrastructure and expertise to generate the necessary scientific data, but was missing the will and capability to accurately recognize hazardous conditions requiring an appropriate response. Given the advances in automation, this could have been automatically programmed with simple code. Basic quality engineering practices specify the trend patterns that should prompt investigation into the processes. This would have added a few hours of work per month for existing employees.
Lesson 2: Segregate non-conforming product from the noncompliant process
FINDING: In addition, the company's control measures for meat that tested positive for E. coli O157:H7 were not always being followed correctly.
There is a food safety process known as "bracketing" which was specified but not adequately followed by XL foods to ensure protection from releasing contaminated product. This quality concern reflects a process that was robustly designed but disregarded by the employees. If this was an oversight, the training and competence of the workers is at issue, and requires correction to the knowledge base. If this however was the result of employee defiance or management subterfuge, then there is an enterprise-wide issue with quality engagement that places product throughput priorities ahead of product safety and consumer protection. Given that XL Foods is a unionized environment, there are organizational risks that would contribute to deficient outcomes. A series of coaching and engagement seminars, kaizen sessions, or quality circles would effectively reinforce guiding principles and ensure that correct responses were applied and reinforced for deficient product.
Lesson 3: Monitor and control all physical, chemical, and biological hazards according to an approved mitigations and contingency plan
FINDING: The company's maintenance plan required updating in order to address minor sanitary issues, mostly related to the older age of the building. The CFIA detected issues related to adequate control of condensation and ventilation issues.
Hazard analysis was conducted and reflected in a robust maintenance plan. A frequent occurrence is that maintenance, particularly preventive maintenance, is sacrificed as an accounting line item with the ethic, "if it ain't broke, don't fix it". Even if the deficient maintenance practices did not create nor enhance the E Coli levels, the inclusion of this finding in the government inspection report reflects that overall confidence of quality and safety is diminished by less than ideal sanitary working conditions. Upgraded maintenance requires investment in capital and assets, along with tools and consumables, but the positive outcomes are realized in both objective terms (better compliance) and subjective impressions (pride, confidence)
The cost of abiding by these lessons could be measured in hundreds or even thousands of dollars, spent as appendages to existing processes and operations. The tragedy is that the government inspectors' reports reveal that systems and practices were established by the company, but not fully followed by the employees. In this sense, the investment in quality and safety management was not yielded, but treated as overhead or a "necessary evil cost of doing business". Top management has to lead by example in following through in deed and word, to show the importance and priority of product safety and quality above all else.
The cost of neglecting and disregarding these lessons has resulted in the disparagement of XL Foods and the entire Canadian meat-packing industry as a safe and reliable provider of quality beef products. The federal government has shut down operations of XL Foods, pending completion of legally mandated corrective actions and assurance of product safety and integrity. The scrutiny and oversight needed for XL Foods until trust is fully regained will place a far greater financial burden on the organization than the initial cost of following the original program already in place.
Lesson 4: Hazards are ever-present and must be discovered and controlled internally to prevent the risk of external release and discovery.
In this specific case, E. Coli is present in all beef products. There are multiple safeguards and contingencies at the disposal of providers, suppliers, and processors, to control E. Coli and ensure that it is limited to safe levels, however with each control comes a cost that must be borne by a party reluctant to absorb that burden from their portion of the returns. By passing on the burden of responsibility, the risk of release is also passed on to its final destination - the customer.
In general, unless we as Quality professionals are vigilant and conscientious, the efforts of our labors may be rendered futile by an unanticipated hazard that could have otherwise been anticipated or detected at an earlier stage where controls or contingencies would have been easier and less expensive. This is the underlying driver behind efforts to reduce the Cost of Poor Quality. The adoption of robust systems, data analytics, and effective response measures is really a protection against the unwanted costs of government investigations, bad publicity, business shutdowns, and a destroyed industrial reputation.